AI TRENDS | BIS Says Middle East Conflict May Leave Lasting Risks for Global Economy

The Bank for International Settlements said a “historic closure” of the Strait of Hormuz triggered a crisis in supplies of energy and other raw materials, creating a new threat to the global economic outlook. According to Jin10, the BIS said that although geopolitical tensions have eased and oil prices have fallen sharply, the effects of the shock may persist. The report said the global economy still showed resilience early this year, supported by optimism linked to advances in artificial intelligence and global trade performance that exceeded expectations. The BIS added that while AI is expected to raise productivity in the future, optimism surrounding the sector may not last. It said that if supply bottlenecks continue to constrain production, the current surge in capital expenditure may be difficult to sustain.